Servitization and Competitive Advantage: The Importance of Organizational Structure and Value Chain Position

Resource Type
RTM Publication
Publish Date
09/01/2015
Authors
Oscar F. Bustinza, Ali Ziaee Bigdeli, Tim Baines, Cindy Elliot
Topics
Customer Insight, Breakthrough Innovation
Associated Event
Publication

OVERVIEW: Servitization represents a business-model change and organizational transformation from selling goods to sell-ing an integrated combination of goods and services. Competitive advantage is one outcome of this shift. During servitiza-tion, companies follow stages to realize services as an opportunity to differentiate from goods and achieve higher customer satisfaction. This study analyzes this transition from base, intermediate, and advanced services by presenting results from 102 senior executives in multinational companies. Our results suggest increasing interest in service-led strategies in manu-facturing companies. The results also show that increasing differentiation and high customer satisfaction are fundamental to achieving competitive advantage and superior performance with services. The analysis also indicates the importance of a company’s position in the value chain and the organizational structure it selects to support services in successful servitization.